Understand the Inner and Outer Plate Ratio in One Minute: How to Judge Stock Price Trends from Buying and Selling Momentum

Open a stock trading software, and besides the opening price, highest, and lowest prices, the two most intriguing numbers that catch short-term traders’ eyes are the mysterious figures—Inner and Outer Plates. Many people only look at the price but don’t understand what these two indicators represent behind the scenes, often resulting in being trapped by the main force. Today, we will thoroughly understand the logic behind inner and outer plates and how to use them to judge the market’s true intentions.

Inner and Outer Plates: Who is in a Hurry to Trade?

First, it’s essential to understand a core logic: The essence of inner and outer plates is to distinguish who is more eager to execute a trade.

Imagine the stock market as a bargaining hall: sellers want to raise the price (ask price), buyers want to lower the price (bid price).

• When a transaction occurs at the bid price, it indicates that the seller is more eager, willing to meet the buyer’s bid directly, and this volume is recorded as Inner Plate, representing greater selling pressure.

• When a transaction occurs at the ask price, it indicates that the buyer is more eager, willing to pay a higher price to buy, and this volume is recorded as Outer Plate, representing stronger buying momentum.

It sounds simple, but it secretly contains market psychology fluctuations.

Inner and Outer Plate Ratio: Market Signals Behind the Numbers

Inner and Outer Plate Ratio = Inner Plate Volume ÷ Outer Plate Volume

This simple ratio can tell you a lot:

Ratio > 1 (Inner Plate Volume > Outer Plate Volume): Market sentiment is turning bearish, sellers are eager to unload, a bearish signal.

Ratio < 1 (Inner Plate Volume < Outer Plate Volume): Market sentiment is turning bullish, buyers are eager to enter, a bullish signal.

Ratio = 1 (Buyers and sellers are balanced): Buying and selling forces are equal, the market is in stalemate, and the future trend is uncertain.

However, there is a trap—looking at the inner and outer plate ratio alone can be easily deceived.

Beware of Two Major Tricks by the Main Force

Real experts know that the main force can manipulate fake inner and outer plate data through a combination of “placing orders - executing trades - canceling orders.”

Fake Bullish Signal: Outer Plate > Inner Plate, but the stock price remains flat or declines, with volume fluctuating wildly. This is often the main force deliberately placing large sell orders to attract retail investors to buy, secretly unloading shares.

Fake Bearish Signal: Inner Plate > Outer Plate, but the stock price quietly rises, with abnormal volume fluctuations. This is the main force placing large buy orders to lure retail investors to sell, secretly accumulating shares.

Therefore, the inner and outer plate ratio must always be viewed together with price position, volume, and order book structure to see the truth.

How to Use Inner and Outer Plate Ratios in Practical Trading

Outer Plate > Inner Plate + Price Rising + Volume Increasing
→ This is the healthiest bullish signal, with buyers actively entering to push up the price, indicating strong short-term upward momentum.

Inner Plate > Outer Plate + Price Falling + Volume Increasing
→ The healthiest bearish signal, with sellers actively unloading to push down the price, indicating strong short-term downward pressure.

Outer Plate > Inner Plate + Price Moving Sideways + Continuous Sell Orders + Sudden Drop
→ Warning! The main force may be distributing shares.

Inner Plate > Outer Plate + Slight Price Increase + Continuous Buy Orders + Continued Rise
→ Warning! The main force may be accumulating shares.

Support and Resistance Zones: The Killer Combo with Inner and Outer Plates

The power of inner and outer plates must be combined with support zones and resistance zones to be truly effective.

When the stock price drops to a certain level and cannot go lower, it indicates a large volume of buy orders at that price—this is a support zone. If at this point, the inner plate > outer plate but the price does not continue to fall, it suggests buyers are accumulating at the lows, and a rebound may follow.

Conversely, when the price rises to a certain level and cannot go higher, it indicates a large volume of sell orders at that price—this is a resistance zone. If at this point, the outer plate > inner plate but the price does not break through, it suggests sellers are exerting strong selling pressure, and a pullback may occur.

Practical strategy: buy at support zones, sell at resistance zones. But remember, once the stock breaks below support or above resistance, a new trend often begins until the next key zone is reached.

Advantages and Disadvantages of Inner and Outer Plate Ratios

Advantages:

• Real-time, updates with transaction data
• Simple and easy to understand
• Quickly gauges short-term buying and selling sentiment

Disadvantages:

• Easily manipulated by the main force; using alone can lead to mistakes
• Only reflects current transaction behavior, not long-term trends
• Must be combined with volume, price position, and fundamentals for accurate judgment

Final Advice

Inner and outer plate ratios are indeed useful tools for observing market buying and selling strength, but no single indicator can dominate all. You also need to consider company fundamentals, economic environment, main force holdings, and other dimensions.

True experts don’t rely on a single indicator to make money; they connect multiple signals to form a comprehensive investment decision system. Inner and outer plates are just one part. Knowing how to interpret them and when to distrust them is the smartest trading strategy.